US CPI cools in March year-on-year, but tariffs may push inflation higher

WASHINGTON -- US consumer inflation in March increased 2.4 percent from a year ago, after rising 3.0 percent in January and 2.8 percent in February, the US Labor Department reported Thursday.

Although inflation has been slowing down, analysts warn that the Trump administration's increased tariffs could drive prices up in the near future.

According to the report released by the Bureau of Labor Statistics, the Consumer Price Index (CPI), a broad measure of goods and services costs across the US economy, decreased 0.1 percent on a seasonally adjusted basis in March after rising 0.5 percent in January and 0.2 percent in February.

Despite the overall data cooling slightly, egg prices in March increased 5.9 percent month-over-month and 60.4 percent year-over-year, reflecting an unresolved egg shortage in the United States.

US egg prices continued to surge due to a shortage of egg-laying hens amid an outbreak of avian influenza, also known as bird flu, adding continued pressure to the inflationary landscape.

The latest inflation report showed that the so-called core CPI, which excludes food and energy, grew 0.1 percent in March, following a 0.2 percent rise in February.

The core CPI rose 2.8 percent over the last 12 months ending March, down from a growth of 3.1 percent in February, signaling continuous inflationary pressure.

Indexes that increased over the month include personal care, medical care, education, apparel, and new vehicles. The indexes for airline fares, motor vehicle insurance, used cars and trucks, and recreation were among the major indexes that decreased in March.

Observers believe policies such as widespread tariff hikes could further raise inflation.

A poll recently released by Reuters and Ipsos showed that as Trump imposes broad tariffs on goods from most parts of the world, a majority of Americans are bracing for rising prices on everyday consumer products. Some 73 percent of respondents believe that after the new tariffs on nearly all imported goods take effect, the prices of items they regularly purchase will increase over the next six months.

Gary Clyde Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics, told Xinhua, price increases might come sooner.

"US companies don't have large enough profit margins to absorb the tariffs. The tariffs will be added to consumer prices and price increases will come within two months," Hufbauer said.